evening report-april 28.

The Indian rupee extended its slide and closed at 50.51 levels as domestic shares fell over 3 percent raising concerns of renewal in capital outflows while losses in other Asian currencies also hurt.The Dollar has started to give back some of its gains after concerns over Bank of America and Citigroup needing more capital added to prevailing bullish greenback sentiment. The dominant risk aversion theme has continued to provide dollar support and may continue to do so as U.S. futures are pointing toward a lower open. The fundamental calendar today has the potential to provide some optimism as consumer confidence is projected to have risen to 29.9 from 26.0, but those figures could be meaningless if current events reverse the improving outlook. Meanwhile the S&P/Case-Shiller Composite-20 gauge is expected to show a slight improvement in home values to -18.70 from -18.97 adding further evidence that the housing market is beginning to bottom. The Richmond Fed manufacturing indicator is also forecasted to improve to -17 from -20 signaling that the U.S. recession may be slowing. Nevertheless, additional banking concerns could spark increasing risk aversion heading into next Monday’s revealing of the stress test results which may continue to fuel dollar support. The Euro saw equal weakness against the Yen but has remained firm against the dollar holding above 1.3000 after reaching as low as 1.2985. The single currency has remain stable after its sharp sell off yesterday on the back of ECB member Nowotny’s comments that the central bank is ready to use quantitative easing measures and will keep its rates low "as long a time as is required." Meanwhile on the economic docket, French data was mixed as consumer confidence rose to -41 from -42, but housing starts saw their largest decline since record keeping began in 2000 of -33.8%. Fundamental data from the region continues to show some signs that the current recession may be slowing, but it is still clear that the downside risk remain for the economy and the central bank will be forced to take further action. Therefore, we may see the Euro continue to trade heavy leading up to next Thursday’s ECB policy meeting. The 4/20 low of 1.2889 is the next major support level to watch. The Pound has started to see choppy price action after declining to 1.4516 on the back of the prevailing risk aversion. Prime Minister Gordon Brown helped ease some concerns when he stated that the U.K. was well prepared for the current health crisis and would do everything necessary to prevent it from spreading. The overall panic regarding the possible pandemic hasn’t been at heightened levels as there is a comfort level that many countries are prepared to combat its spreading after experiencing SARS. The fundamental calendar is light this week for the pound which could leave it at the mercy of the broader risk trends. Unlike the ECB, the BoE isn’t expected to make major changes to its monetary policy next week, but markets will look for a report card on the quantitative efforts and its impact. Therefore, if we see fears ease, sterling may begin to see support return.The Yen continued to find support overnight as concerns that Bank of America and Citigroup would need more capital added to the risk aversion generated by the World Health Organization raising the alarm level for the "swine flu" to 4. Indeed, as the results of the U.S. government’s stress test begin to leak out, speculation is growing that two of the county’s largest banks will need additional capital to survive the current downturn. Meanwhile, the WHO making the "swine flu" the first health crisis to reach the highest level of concern since the ratings were instituted has raised the chances of a pandemic. Indeed, the leading health organization stated that the virus can no longer be contained as cases have been confirmed in the U.K. and Canada adding to the growing numbers in Mexico and the U.S.